SEOUL, July 16 (AFP): South Korean tax authorities have sent bills totalling tens of millions of dollars to a US and a British financial group over the sale of a local bank, a newspaper said today.
Tax officials are seeking up to 20 billion won (21.7 million dollars) in taxes from US equity fund Newbridge Capital and 45 billion won from British-based banking giant Standard Chartered, the Korea Economic Daily said.
Newbridge bought a controlling stake in Korea First Bank (KFB) in 1999 following the Asian financial crisis which devastated the local banking industry.
The US fund reaped a massive profit of more one billion dollars on its investment by selling its stake in KFB to Standard Chartered in 2005.
Standard Chartered paid 3.4 trillion won to acquire a 49 per cent stake in KFB from Newbridge and the remaining 51 per cent from the South Korean government.
Newbridge did not pay a penny in South Korea by making investments through its unit in a tax haven in Malaysia, which has a treaty on preventing double taxation with South Korea.
South Korea revised its tax system last year to levy taxes on foreign investors even if they are registered in tax havens.
Both Newbridge and Standard Chartered have appealed against the tax bills, the newspaper said. Tax officials refused to confirm the report and Newbridge officials were not immediately availabe for comment.
KFB spokesman Kim Poong-Ho confirmed that Standard Chartered had been invetigated by tax officials but said the issue was handled by its headquarters in Britain.
"Our executives from Standard Chartered here have not been involved in the case," he said. Bank officials in Hong Kong could not immediately comment on the case.
KFB is South Korea's seventh largest bank with more than three million retail customers.
Newbridge, StanChart face heavy taxes in SKorea
FE Team | Published: July 17, 2007 00:00:00 | Updated: February 01, 2018 00:00:00
Share if you like